In a scathing report that threatens the job of Toronto Community Housing Corp. chief executive Gene Jones, the city ombudsman says Jones and other senior TCHC executives ignored hiring rules and conflicts of interest, gave managers unjustified raises, fired people recklessly and impulsively, and ran the city-owned landlord “as though it was their own personal fiefdom.”

“This is a shocking story about the abject failure of leadership from the top. The CEO set the tone, describing his every move as ‘his prerogative.’ Poor management followed,” ombudsman Fiona Crean wrote in the report released on Tuesday.

Crean chronicled a long list of alleged violations by Jones, whom she called “irresponsible,” and the vice-president of human resources, Anand Maharaj. She also found that the board of directors, which includes four city councillors, failed to adequately oversee the managers who had run “amok.” And she said the apparent abuses might have cost the city money.

“Some wage levels were arbitrarily determined. It is unacceptable for a public organization to determine salaries without an evaluation of the responsibilities and qualifications of the position,” she wrote. “This has not only caused an inequity at TCH between employees with similar jobs, but it could very well have wasted taxpayers’ dollars.”

After a four hour emergency meeting, where board members heard directly from Crean, Jones and other executive leaders, chair Bud Purves said “the board acknowledges the need to address these issues.”

“We made progress but agreed that more time is needed to further study and consider the report.” The board will therefore resume its discussion Friday at 8 a.m. Purves will update media after on status of boards deliberations. He left without taking questions and Jones was nowhere to be seen.

Jones enjoys the strong backing of Ford, who said this weekend that he would support Jones no matter what the report said — and whose campaign literature claims he has restored “public faith” in the TCHC. Mayoral challengers seized on the report to bolster their criticism of Ford’s leadership.

"The mayor has repeatedly claimed that he has personally addressed mismanagement at our social housing provider. This report provides clear evidence that Mayor Rob Ford’s claims are not true,” Karen Stintz said in a statement.

“There are obvious problems with oversight and structure. These mirror many of the problems our city has seen under Rob Ford, who also sees rules as annoyances,” Olivia Chow said in a statement. “He, in fact, tried to remove the ombudsman’s oversight of city hall.”

Jones declined immediate comment. In a written response to the report, the TCHC said it has worked to improve its human resources practices. But it said it accepts Crean’s findings and will work “swiftly” to implement her recommendations.

“During a sustained period of organizational change there have been several instances when management inconsistently applied or ignored the company’s policies and procedures for hiring, promotions and terminations. Management acknowledges that its actions fell short of the high standard of transparency, equity, fairness and respect that Toronto Community Housing, as a public sector employer, must meet,” the TCHC said in the statement.

Among other things, Crean found:

Some senior managers got “unfair and unjustified” salary increases without any formal evaluation. In one case, people making $100,000 got a 12 per cent increase, then a 10 per cent increase eight months later.

Councillor Vincent Crisanti’s executive assistant, Lisa-Joan Overholt, was hired by Jones without a competition or job posting, then quickly promoted to senior director and given a $30,000 raise.

Chief financial officer Jason Gorel, who had sat on the board of directors, had not recused himself from the board at the time he successfully interviewed for the job.

Jones hired a vice-president of asset management even though that person did not apply, even though Jones did not interview them, and even though there were supposed to be four days left in the open competition. Jones argued that it was unlikely any good candidates would have applied.

Jones’s executive assistant, Leisin Chan, experienced a “meteoric” and “anomalous” salary increase. Chan eventually made more than $100,000 per year, more than some TCHC directors — which “flabbergasted” Purves — and was paid overtime even though she was not eligible for it. “There was a concerted effort” to “misrepresent her pay and keep it under $100,000,” Crean wrote.

Maharaj himself was made vice-president of human resources “without due process,” after only a month as acting vice-president. Jones did not bring the appointment to the board as he was supposed to.

Dozens of people were hired or promoted without competition. Of 96 external hires from June 2012, when Jones began, to October 2013, there were no job postings for 18 of them.

“The practice of hiring and promoting candidates to positions for which they did not compete is unreasonable and contrary to policy,” Crean wrote.

Senior executives ignored potential conflicts of interest in hiring decisions. In one case, Gorel told an external auditor who was working under him about a job posting, then told the hiring manager to give her the job. In another case, he hired someone he had used as a reference for his own job.

Jones believed it was Maharaj’s responsibility, not his own, to know personnel rules. But Maharaj was unaware of key documents.

While Jones had a mandate for change, “terminations often seemed poorly planned, even impulsive.” The “wholesale terminations” of experienced staff, without cause, created a climate of fear and anxiety. In one case, three senior managers were fired one day by a new manager who had just started that day; it appeared, Crean wrote, as if these firings “were designed to create fear.”

Jones arrived at an April 15 meeting with Crean without having thoroughly reviewed her report; he was the “one notable exception” among managers and the board of directors.

With files from Betsy Powell

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